U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2003
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OF 15(D) OF THE
EXCHANGE ACT OF 1934
From the transition period from __________ to ___________
Commission file number 00030074
APO HEALTH, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA 86-0871787
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(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
3590 OCEANSIDE ROAD, OCEANSIDE, NEW YORK 11575
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(Address of principal executive offices)
(800) 365-2839
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(Issuer's Telephone Number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days:
Yes X No
--- ---
As of August 6 , 2003, 30,156,045 shares of Common Stock of the issuer were
issued.
APO HEALTH, INC.
FORM 10-Q
QUARTER ENDED JUNE 30, 2003
TABLE OF CONTENTS
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PAGE
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PART I - FINANCIAL INFORMATION
ITEM 1 Financial Statements.
Consolidated Balance Sheet as of
June 30, 2003 and September 30, 2002. 3
Consolidated Statement of Income for the three and nine
months ended June 30, 2003 and 2002. 4
Consolidated Statement of Cash Flows for the
nine months ended June 30, 2003 and 2002. 5
Notes to Consolidated Financial Statements. 6 - 11
ITEM 2 Management's Discussion and Analysis
or Plan of Operations. 12 - 13
PART II - OTHER INFORMATION
ITEM 1 Legal Proceedings. 14
ITEM 2 Changes in Securities and Use of Proceeds. 14
ITEM 3 Default upon Senior Securities. 14
ITEM 4 Submission of Matters to a Vote of Security Holders. 14
ITEM 5 Other Information. 14
ITEM 6 Exhibits and Reports on Form 8-K. 14
SIGNATURES 15
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PART I - FINANCIAL INFORMATION
APO HEALTH, INC.
CONSOLIDATED BALANCE SHEET
JUNE 30, SEPTEMBER 30,
2003 2002
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(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash $ 94,679 $ 520,618
Accounts Receivable, net of allowance for
doubtful accounts of $50,000 and $30,000 4,160,404 1,511,295
Inventory 1,623,599 2,242,609
Due from Officers 128,905 113,905
Notes and Other receivables 90,150 258,500
Deferred Tax Assets 20,000 12,000
Other Current Assets 80,813 18,297
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Total Current Assets 6,198,550 4,677,224
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Property and Equipment, net of accumulated
Depreciation of $96,368 and $88,496 20,627 28,499
Deferred tax asset 51,200 61,563
Deposits 7,500 7,500
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Total Assets $ 6,277,877 $ 4,774,786
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Cash Overdraft $ 52,110 $ --
Bank Notes Payable 787,186 1,350,000
Accounts Payable 3,307,091 1,118,288
Accrued Expenses 351,992 200,718
Customer Deposits 177,584 665,596
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Total Current Liabilities 4,675,963 3,334,602
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STOCKHOLDERS' EQUITY:
Common stock, $.0002 par value,
125,000,000 shares authorized, 30,156,045
and 24,554,227 shares issued and outstanding 6,005 4,904
Paid-in Capital 1,772,359 1,621,983
Retained Earnings (Deficit) (176,450) (186,703)
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Total Stockholders' Equity 1,601,914 1,440,184
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Total Liabilities and Stockholders' Equity $ 6,277,877 $ 4,774,786
=========== ===========
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APO HEALTH, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED
JUNE 30, 2003 AND 2002 (UNAUDITED)
THREE MONTHS NINE MONTHS
2003 2002 2003 2002
------------ ------------ ------------ ------------
Revenue $ 17,367,339 $ 8,409,050 $ 39,602,840 $ 21,798,465
Cost of Revenue 16,631,937 7,859,873 37,733,214 19,974,012
------------ ------------ ------------ ------------
Gross Margin 735,402 549,177 1,869,626 1,824,453
------------ ------------ ------------ ------------
Operating Expenses
Selling Expense 171,298 191,488 438,586 589,351
General and Administrative Expenses 488,072 378,429 1,348,478 1,175,150
------------ ------------ ------------ ------------
659,370 569,917 1,787,064 1,764,501
------------ ------------ ------------ ------------
Income from Operations 76,032 (20,740) 82,562 59,952
Interest Expense 14,540 22,908 69,946 85,101
------------ ------------ ------------ ------------
Income (loss) before Provision for
Income Taxes 61,492 (43,648) 12,616 (25,149)
Provision for (Recovery of)
Income Taxes 2,363 (9,515) 2,363 (2,685)
------------ ------------ ------------ ------------
Net Income Before Discontinued
Operations 59,129 (34,133) 10,253 (22,464)
Discontinued Operations
Gain on Sale of Discontinued
Operations Net of Taxes -- 2,812 -- 317,687
Income (loss) from Discontinued
Operations Net of Taxes -- 300 -- 35,819
------------ ------------ ------------ ------------
Discontinued Operations -- 3,112 -- 353,506
------------ ------------ ------------ ------------
Net Income $ 59,129 $ (31,021) $ 10,253 $ 331,042
============ ============ ============ ============
Basic and Diluted Earnings
Per Common Share:
From Continuing Operations $ .00 $ (.00) $ .00 $ (.00)
From Discontinued Operations .00 .00 .00 .01
------------ ------------ ------------ ------------
Total $ .00 $ .00 $ .00 $ .01
============ ============ ============
Weighted Average Common Shares
Outstanding 27,536,910 23,754,874 25,890,925 23,637,943
============ ============ ============ ============
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APO HEALTH, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED
JUNE 30, 2003 AND 2002 (UNAUDITED)
2003 2002
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CASH FLOW FROM OPERATING ACTIVITIES:
Net Income $ 10,253 $ 331,042
Adjustments to Reconcile Net Income to
Net Cash Flows from Operating Activities:
Depreciation and Amortization 7,872 20,742
Deferred Taxes 2,353 15,118
Write-off Goodwill Discontinued Operations -- 125,537
Stock Issued for Services 151,477 5,047
Allowance for Doubtful Accounts 20,000 --
Changes In:
Accounts Receivable (2,669,109) (376,436)
Other Receivables 168,350 (250,000)
Inventory 619,010 (840,720)
Other Current Assets (62,516) 117,600
Cash Overdraft 52,110
Accounts Payable 2,188,803 373,544
Accrued Expenses 151,274 (5,759)
Income Taxes Payable -- 97,750
Customer Deposits Payable (488,012) 780,227
Other Current Liabilities -- 17,096
----------- -----------
Cash Flows from Operating Activities 151,875 410,788
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CASH FLOWS FROM INVESTING ACTIVITIES:
Investment In Subsidiary -- (25,000)
Assets Acquired Net of Cash Investment -- (17,891)
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Net Cash From Investing Activities -- (42,891)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from Officers, Net (15,000) (44,570)
Proceeds (Payment) on Bank Notes Payable, Net (562,814) 42,030
----------- -----------
Cash Flows from Financing Activities (577,814) (2,540)
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Net Increase (Decrease) in Cash (425,939) 365,357
----------- -----------
CASH BALANCES:
Beginning of Period 520,618 179,167
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End of Period $ 94,679 $ 544,524
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APO HEALTH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following financial information is submitted in response to the requirements
of Form 10-Q and does not purport to be financial statements prepared in
accordance with generally accepted accounting principles. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted, although the Company believes the disclosures that are made are
adequate to make the information presented not misleading. Further, in the
opinion of the management, the interim financial statements reflect fairly the
financial position and results of operations for the periods indicated.
It is suggested that these interim consolidated financial statements be read in
conjunction with the financial statements and notes thereto included in the
Company's Form 10K containing the Company's audited financial statements as of
and for the year ended September 30, 2002 filed with the Securities and Exchange
Commission.
The results of operations for the nine months ended June 30, 2003 are not
necessarily indicative of results to be expected for the entire fiscal year
ending September 30, 2003.
NOTE 1 - SUMMARY OF ACCOUNTING POLICIES
NATURE OF BUSINESS AND BASIS OF CONSOLIDATION. APO Health, Inc. ("APO") was
incorporated under the laws of the state of New York in August 1978. APO and its
wholly-owned subsidiary, Universal Medical Distributors, Inc. ("Universal")
distribute disposable medical products principally to dental, medical and
veterinary professionals and wholesalers in the United States, principally on
the East Coast. Effective June 13, 2001, InternetFinancialCorp.com, Inc.,
("IFAN"), a Nevada corporation, which is an inactive public company acquired
APO, (collectively, the "Company"), pursuant to a tax-free reorganization
agreement. The acquisition was accounted for by the purchase method under
business combinations in a reverse acquisition transaction. Concurrently, IFAN
changed its name to APO Health, Inc., a Nevada corporation.
CASH AND CASH EQUIVALENTS. For purposes of the statements of cash flows, cash
equivalents include all highly liquid investments with original maturities of
three months or less.
Revenue recognition occurs when products are shipped.
Merchandise inventory is stated at the lower of cost or market. Cost is
determined using the first-in, first-out method.
Property and equipment is stated at cost. Depreciation is provided for on the
straight-line method over the useful estimated life. The cost of maintenance and
repairs is expensed as incurred.
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APO HEALTH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Income taxes are computed using the tax liability method of accounting, whereby
deferred income taxes are determined based on differences between financial
reporting and tax bases of assets and liabilities and are measured using the
enacted tax rates that will be in effect when the differences reverse.
EARNINGS PER SHARE. Basic net income per share has been calculated based on the
weighted average number of shares of common stock outstanding during the period.
Diluted net income per share is computed by dividing the net income by the
weighted average number of common shares outstanding plus potential dilutive
securities.
RECLASSIFICATIONS. Certain reclassifications of certain prior year amounts were
made to conform to the current year presentation.
ESTIMATES AND ASSUMPTIONS. Preparing financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities, revenue
and expenses at the balance sheet date and for the period then ended. Actual
results could differ from these estimates.
NOTE 2 - SUPPLEMENTAL CASH FLOW STATEMENT DISCLOSURES
2003 2002
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Cash paid during the year for:
Interest $ 69,946 $ 85,101
Non-cash transaction:
Common Stock Issued for Consulting
And Professional Fees $151,477 $ 5,047
NOTE 3 - BANK NOTES PAYABLE
On October 29, 2002, the Company entered into a financing agreement with
Rosenthal & Rosenthal, Inc. The financing agreement provides the Company with a
maximum credit facility not to exceed $3,000,000.The credit facility is
collateralized by substantially all the Company's assets and $500,000 of the
facility is personally guaranteed by Dr. Jan Stahl, Chairman and CEO of the
Company. Interest is payable monthly on the average daily loan balance at the
announced prime rate of JP Morgan Chase bank plus 2.5%. This agreement is for a
period of three years through October 31, 2005 and may be extended on a year to
year basis thereafter unless terminated as provided in the agreement.
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APO HEALTH INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 - INCOME TAXES
Income taxes (benefit) consist of the following:
2003 2002
--------- ---------
Continuing Operations $ 2,363 $ (2,685)
Discontinued Operations -- 182,901
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$ 2,363 $ 180,216
========= =========
A reconciliation of income tax at the federal statutory income tax rate to total
income taxes is as follows:
2003 2002
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Computed at the federal
statutory rate of 34% $ 4,289 $ 173,828
State income tax 165 46,013
Operating loss carry forward (2,363) (46,112)
Other adjustments 272 6,487
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$ 2,363 $ 180,216
========= =========
The components of deferred taxes are as follows:
June 30, September 30,
2003 2002
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Deferred tax assets
Allowance for doubtful accounts $ 20,000 $ 12,000
Depreciation 18,800 11,963
Net operating loss carryover, 10,100 27,300
Reversal of valuation allowance 22,300 22,300
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Total deferred tax assets 71,200 73,563
Less Current Portion (20,000) (12,000)
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Non current deferred tax asset $ 51,200 $ 61,563
========= =========
The Company has a net operating loss carryover of approximately $ 81,000 to
offset future taxable income. The carryover expires 2017.
NOTE 5 -DISCONTINUED OPERATIONS
In February 2002, the Company sold the veterinary division of Universal Medical
Distributors, Inc. The financial statements for 2001 have been restated to
reflect the discontinued operations of this division. In connection with the
sale of the veterinary division, the Company received a note in the amount of
$250,000 which was due on January 31,2003.
In January 2002, the Company acquired Envirotech Air Quality Services, Inc.
("Envirotech"). The Company sold "Envirotech" in August 2002 which included a
note in the amount of $8,500 receivable over a period of 19 months with interest
at the rate of 18% per annum.
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APO HEALTH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 - COMMON STOCK
Stock Option Plan
On July 22, 2002, the Company adopted a Bonus Compensation Warrant Agreement,
whereby, the Company would issue Bonus Compensation Warrants equivalent to 10%
of the price of any merger or acquisition brought to the Company. All of the
warrants being exercisable into shares of common stock at 80% of the 20 day
average bid and ask price of the Company's common stock. The Company authorized
up to a maximum aggregate of 3,000,000 shares of common stock available for any
Bonus Compensation Warrants.
On October 1, 2002, the Company filed a form S-8 authorizing the issuance of up
to 1,000,000 shares of common stock for consultants and professionals. In
January the Company issued 650,000 of those shares valued at $.03 per share or
$19,500 for consulting for business development, including mergers and
acquisitions.
On March 14, 2003, the Company filed another form S-8 authorizing the issuance
of up to 2,750,000 shares of common stock for consultants and professionals. On
March 26, 2003, 1,200,000 shares of common stock valued at $.03 per share or
$36,000 for consulting and professional fees for business development including
mergers and acquisitions. On April 8 and on May 20, 2003, the Company issued an
additional 2,040,000 shares of common stock for consultants and professional
valued at $.03 per share or $61,200.
On June 19, 2003 the Company issued 1,711,818 shares of restricted common stock
in lieu of cash payments of bonuses earned. The restricted shares of common
stock were valued at $.02 per share for a total of $34,776.
NOTE 7 - LEASES
The Company leases 11,800 square feet of office and warehouse space in New York.
The lease is month-to-month with affiliated companies owned by the Company's
officers and shareholders. The affiliate's underlying New York lease expires in
2004. Lease payments made by the Company approximate the payments due by the
affiliated companies. Rent expense for the nine months ended June 30, 2003 and
2002 was $46,399 and $56,038 respectively.
Future minimum lease payments are as follows:
Year ended March 31, 2004 $72,450
2005 $56,175
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APO HEALTH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 - COMMITMENTS AND CONTINGENCIES
Litigation
There is an action pending in the Circuit/Superior Court of Marion County,
Indiana entitled Kenro, Inc., on behalf of itself and all others similarly
situated against APO Health, Inc. The lawsuit involves unsolicited broadcast
faxes sent in the state and has been certified as a class action suit. The
Company has petitioned the court to certify its class action certification order
for interlocutory appeal. If the Company can defeat the class certification,
then the plaintiff is limited to a single violation with a maximum potential
recovery of $1,500. If the class certification issue is lost then the Company's
exposure can range in the millions of dollars. The Company has filed a suit
seeking indemnification by or contribution from the vendors who sent the faxes
on behalf of the Company. It is the Company's belief and contention that
damages, if any, which may be awarded to the plaintiff are covered by insurance
up to policy limits.
However, on October 24, 2001, the Company was named as a defendant in Merchant's
& Business Men's Mutual Insurance Company vs. APO Health, Inc. Merchant's &
Business Men's Mutual Insurance Company issued a Commercial Blanket Excess
Liability insurance policy to the Company for one year commencing February 27,
2000 up through February 27, 2001. Merchant's & Business Men's Mutual Insurance
Company alleges in its complaint that policy coverage with the Company does not
extend to the allegations set forth in the aforementioned Kenro suit. The
Company, however, disagrees and contends that the policy issued by Merchant's &
Business Men's Mutual Insurance Company obligates them to cover any damages that
the Company may incur, as a result of an unfavorable verdict in the Kenro suit.
On July1, 2002, the Court granted the intervention motion of the Kenro
plaintiffs, and, as a matter of law, denied Merchant's motion for summary
judgement and granted the Company's cross-motion for summary judgement, and
finding that the claims asserted against the Company in the Kenro lawsuit fell
within the terms of the Merchant's policies. As a result, the Court ordered that
Merchant's has a duty to defend and indemnify the Company in the Kenro lawsuit.
Additionally, the Court found alternatively, that the disclaimer of coverage by
Merchant's was untimely, so that Merchant's would not be allowed to rely upon or
raise any coverage defenses. The Court also found that the Company is entitled
to be reimbursed for the legal fees that it incurred, and ordered that a hearing
be conducted to determine the amount that Merchant's owed. Merchant's
subsequently filed a motion for reargument of its unsuccessful summary judgement
motion, and papers in opposition have been submitted by the Company and the
Kenro plaintiffs to the Court. The Company and the Kenro plaintiffs have argued
that the Court should adhere to its original decision for a variety of reasons.
Merchant's has also filed an appeal to the Appellate Division from the Court's
July 1, 2002 Order, and in the event the Court adheres to its decision, it is
expected that Merchant's will again notice an appeal, and move to have the two
appeals consolidated.
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APO HEALTH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 - COMMITMENTS AND CONTINGENCIES (continued)
Employment Agreement
Effective October 1, 2001, the Company has entered into a three-year employment
agreement with its chief executive officer that provides for a minimum annual
salary of $250,000 with incentives based on the Company's attainment of
specified levels of sales and earnings as defined in the agreement. The
employment agreement expires September 30, 2004 and shall be automatically
renewed for successive periods of one year unless either party gives written
notice to terminate the agreement.
NOTE 9 - CONCENTRATION OF CREDIT RISK
The Company maintains cash balances at various financial institutions. At times
such balances exceed the insured limits of the financial institution. The
Company has not experienced any losses in such accounts and does not believe it
is exposed to any significant credit risk on cash balances. As of June 31, 2003,
the Company had $155,500 on deposit, in excess of the $100,000 that is insured
under federal law.
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ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
RESULTS OF OPERATIONS
Results of operations for the three and six months ended June 30, 2002 have been
restated to reflect the sale of the veterinary division and Envirotech.
Revenue for the nine months ended June 30, 2003 were $39,602,840, an increase of
$17,804,195 or 81.7% in revenue over the nine months ended June 30, 2002.
Revenue for the three months ended June 30, 2003 were $17,367,339, an increase
of $8,958,289 or 106.5% in revenue over the three months ended June 30, 2002.The
increase in revenue for both the three and nine months was due to large
increases in the distribution of products to wholesale distributors. The Company
does not know if they will be able to sustain this growth in future periods.
Cost of sales for the nine months ended June 30, 2003 was $37,733,214, an
increase of $17,759,202 or 88.9% over the nine months ended June 30, 2002. Cost
of sales for the three months ended June 30, 2003 was $16,631,937, an increase
of $8,772,064 or 111.6% over the three months ended June 30, 2002. As a result
the gross margin for the nine months ended June 30, 2003 was $1,869,626 or 4.72%
compared to $1,824,453 or 8.37% for the nine months ended June 30, 2002. The
gross margin for the three months ended June 30, 2003 was $735,402 or 4.23%
compared to $549,177 or 6.53% for the three months ended June 30, 2002. The
decrease in the gross profit margins are a result of increased revenue from
wholesale products which have significantly lower profit margins than retail
sales and the decrease in revenue from retail dental sales. Medical supply sales
which have a higher gross profit margin than the wholesale products have
increased but have not yet made up for the decrease in the dental sales. The
Company expects that the increases in sales of medical supplies will make up for
the loss in dental sales and increase the Company's overall gross profit margin.
Selling expenses for the nine months ended June 30, 2003 were $438,586 a
decrease of $150,765 or 25.6% compared to the nine months ended June 30, 2002.
The Company has reduced shipping costs by $20,607; commissions by $40,915; and
advertising costs by $127,951.
Advertising costs in the next three to six months will increase as the Company
brings out several new catalogues. Travel and entertainment expenses increased
by $47,215, which is related directly to increased contact with medical and
wholesale purchasers.
General and administrative expenses for the nine months ended June 30, 2003
increased by $173,328 or 14.7% over the nine months ended June 30, 2002. Total
compensation including payroll taxes increased by approximately, $123,700 which
included a bonus of $268,000 for one of the officers for attaining sales levels
included in his employment agreement. Without this bonus, employment expenses
would have decreased by approximately $144,200 which includes the reduction of
two employees and voluntary salary reductions by the three officers of the
Company. Other increases included consulting fees which increased by $77,582, as
the Company was exploring the possibilities of an acquisition or merger. The
consulting agreements have been cancelled and this nonrecurring item will be
eliminated in the future. Professional and financing expenses decreased by
approximately $21,900 as legal expenses in defending the litigation decreased by
approximately $40,000 while the cost of the new financing agreement increased
financing costs by approximately $20,000. All other general and administrative
expenses decreased by approximately $6,000.
-12-
Interest expense for the nine months ended June 30, 2003 was $69,946 a decrease
of $15,155 from the nine month period ended June 30, 2002. This was accomplished
by entering into a new financing agreement where all collections are applied
against the line of credit on a daily basis and proceeds from the line of credit
are only taken when needed to pay down liabilities. As a result the average
daily balance outstanding on the line of credit has been reduced. The new
financing agreement allows the Company greater flexibility in its ability to
finance increased sales and additional inventory.
FINANCIAL CONDITION
As of June 30, 2003, The Company had net working capital of $1,522,587, an
increase of $179,965 from September 30, 2002. The increase came from net income
earned during the nine months ended June 30, 2003 and expenses incurred but paid
through the issuance of common stock for consulting services. On October 29,
2002, the Company entered into a new financing agreement which increased its
credit facility by $1,000,000 to $3,000,000 giving the Company greater
flexibility to finance larger receivables and inventory allowing for increased
sales.
For fiscal 2003, the Company has reduced its budget for both selling and general
and administrative expenses by approximately $255,000 eliminating unnecessary
expenses and revising some of the operations. In addition the Company expects
that consulting and other professional fees will be reduced by approximately
$150,000 which it estimated were non-recurring items. The above reductions would
provide the Company with income from operations based on the current sales
volume.
Based upon the above factors, the Company believes that it has sufficient funds
for operations for the next fiscal year.
-13-
PART II - OTHER INFORMATION
APO HEALTH, INC.
ITEM 1 - LEGAL PROCEEDINGS
There is an action pending in the Circuit/Superior Court of Marion County,
Indiana entitled "Kenro, Inc., on behalf of itself and all others similarly
situated against APO Health, Inc., Cause No. 490120101CP000016." The lawsuit
involves unsolicited broadcast faxes sent in the state and has been certified as
a class action suit. The Company has petitioned the court to certify its class
action for interlocutory appeal. The Company has filed a suit seeking
indemnification by or contribution from the vendors who sent the faxes on behalf
of the Company. It is the Company's belief and contention that damages, if any,
which may be awarded to the plaintiff are covered by insurance up to policy
limits.
However, on October 24, 2001, the Company was named as a defendant in Merchant's
& Business Men's Mutual Insurance Company vs. APO Health, Inc., Case No.
01-605-091, Supreme Court of the State of New York, County of New York.
Merchant's & Business Men's Mutual Insurance Company issued a Commercial Blanket
Excess Liability insurance policy to the Company for one year commencing
February 27, 2000 up and through February 27, 2001. Merchant's & Business Men's
Mutual Insurance Company alleges in its complaint that policy coverage with the
Company does not extend to the allegations set forth in the aforementioned Kenro
suit. The Company, however, disagrees and contends that the policy issued by
Merchant's & Business Men's Mutual Insurance Company obligates them to cover any
monetary damages that the Company may incur, as a result of an unfavorable
verdict in the Kenro suit.
ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3 - DEFAULT UPON SENIOR SECURITIES
None.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5 - OTHER INFORMATION
None.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
31.1 Principal Executive Officer certification pursuant to Rule 13a-14 and
15d-14 under the Securities Exchange Act of 1934, as amended, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Filed herein.
31.2 Principal Financial Officer certification pursuant to Rule 13a-14 and
15d-14 under the Securities Exchange Act of 1934, as amended, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Filed herein.
32.1 Chief Executive Officer certification pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002. Filed herein.
32.2 Chief Financial Officer certification pursuant to 18 U.S.C. 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Filed herein.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
APO HEALTH, INC.
Date: August 11, 2003 By: /s/ Dr. Jan Stahl
------------------
Dr. Jan Stahl, Chairman
Chief Executive Officer
And Secretary
(Principal Executive Officer)
Date: August 11, 2003 By: /s/ Peter Steil
----------------
Peter Steil, President
and Treasurer
(Principal Financial and
Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
Date: August 11, 2003 By: /s/ Dr. Jan Stahl
------------------
Dr. Jan Stahl, Director
Date: August 11, 2003 By: /s/ Peter Steil
----------------
Peter Steil, Director
Date: August 11, 2003 By: /s/ Kenneth Leventhal
----------------------
Kenneth Leventhal, Director
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